Gowing Bros (GOW) H2 2023 earnings summary

Executive summary

• Twelve interest rate rises led to higher interest expenses and a $13.3m downward revaluation of the shopping centre portfolio, resulting in a net loss after tax of $5.3m compared to a $10.9m profit the previous year.

• Operational profit was $2.8m, down from $7.7m, mainly due to losses at Surf Hardware International and increased interest rates.

• Shopping centres saw a rebound in foot traffic and trading to pre-pandemic levels, with strong leasing interest and new shop openings.

• Stage 3 of Sawtell Commons completed with 31 blocks sold; local residential land market remains strong.

• Sustainability initiatives advanced, including solar installations, composting, EV charging, and carbon capture projects.

Financial highlights

• Net assets per share before tax on unrealised gains decreased to $3.86 (from $4.03).

• Total net income from ordinary activities was $9.1m, a 25% decrease year-over-year.

• Net profit after tax was a loss of $5.3m, compared to a $10.9m profit last year.

• Earnings per share was (9.91)c, down from 20.42c.

• Dividends paid per share were 7.0c, down from 8.0c.

• Total shareholder return was (2.5)%, compared to 5.7% last year.

Outlook and guidance

• The outlook remains uncertain due to macroeconomic conditions, but the business is well-positioned in the Mid North Coast region, which continues to benefit from population growth and infrastructure investment.